According to a survey of business, academic, and financial economists conducted by the Wall Street Journal, there is a general consensus that the US economy is in for steady economic and labor market times, but with little improvement over the next two and a half years. The unemployment rate has come down significantly from the height of the 2008 recession (10%) to today's 4.9%; most economists surveyed believe, however, that more significant reduction is unlikely and that come the end of 2018, the unemployment rate will most likely be around 4.5%. Another key indicator of labor market health, the underemployment rate, is again significantly lower today at 9.7% than it was a few years ago at 17%, but progress has already slowed and the statistic is likely to end up at around 9% by end 2018. Pushing this number down any more would require structural economic shift away from using part time workers, something that is unlikely to happen. August job growth was 192,000, but similarly to the aforementioned statistics, economists see this slowing to in the neighborhood of 157,000 within a two and a half year period, putting it just slightly above the rate necessary to keep pace with population growth. The general consensus from the survey was that the Fed is expected to raise interest rates in December, but any other policy, especially with the upcoming election, is unlikely to come out of congress this year. The estimated chance of an upcoming recession, has continued to lower and is currently at 20%, and unquestionably good sign. The general takeaway from the economic survey seems to be that the growth and renewed strength of the labor force we saw after the recession is quickly diminishing, although with slim chances of a recession relapse, the American economy is likely to simply coast for an upcoming period of time.
http://www.wsj.com/articles/wsj-survey-of-economists-sees-slowing-labor-market-progress-1473343201
As you mentioned it is unlikely much will change with this being an election year; however, it will be interesting to see what will change after, especially with job growth. If either Clinton or Trump get their large infrastructure program up and running, then that could certainly increase the amount of skilled and un-skilled jobs in years to come.
ReplyDeleteAs noted above, the unemployment rate is currently at 4.9%, which indicates a strong rebound from the 2008 recession, and that it is expected to decrease to 4.5 % by 2018. It is important to note that the economy wants some unemployment, frictional and structural. No structural unemployment would indicate no technological advancements. Frictional unemployment is also a sign of a strong economy because it indicates workers confidence in finding a new, more desirable job. Frictional and Structural unemployment put together equal the natural rate of unemployment which is what any economy desires.
ReplyDeleteThe stability currently being experienced, has been very beneficial to the economy getting back up on its feet since the recession, however I see it unlikely to last. With the election coming up, no matter the candidate elected, I would predict our slow, and steady economic growth may be pushed aside for another agenda despite the Fed's mandates. Additionally, with the majority of the population feeling steady in both their financial and job markets, they are more likely to take risks on their investments, and save less. In all, I hope that the job market stability ensues with low unemployment rates in the upcoming years so we are not all questioning moving back into our parent's homes.
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